Blue Cash Preferred from American Express Review: 6% Cash Back on Groceries

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The Blue Cash Preferred® Card from American Express is a cash back rewards card with a unique feature that still hasn’t been copied by competitors: 6% cash back at US stand-alone supermarkets on up to $6,000 per year in purchases. If you spend $65 a week at supermarkets, that alone will earn you over $200 a year in rewards. Highlights:

$200 statement credit after $1,000 in purchases within the first 3 months.

6% cash back at US stand-alone supermarkets up to $6,000 per year in purchases (then 1%).

3% cash back on gasoline at at US stand-alone gas stations

3% cash back at select major US department stores

1% cash back on all other purchases.

Intro 0% APR for 12 months on purchases and balance transfers, then a variable rate, currently 14.74% to 25.74%.

$95 annual fee.

Terms apply.

Tracking your spending and last-minute holiday shopping. Every December, I use this card to buy gift cards at a standalone grocery to use up the annual limit and get 6% back. My local Safeway has an entire wall of options, but I usually go with Amazon, Apple iTunes, or Starbucks. You can easily track how much you’ve spent on groceries on your online account. Just go to “Statements & Activity” > Chart logo (Graph and Filter your Transactions), and then click on “Merchandise and Supplies”. Adjust dates as necessary. Screenshot:

Supermarkets details. “US stand-alone supermarkets” means that superstores, convenience stores and warehouse clubs are not considered supermarkets. This means no Super Wal-Mart, no Super Target, no Costco. Examples of merchants that count (and this is not a complete list!) are Safeway, Meijer, Vons, Whole Foods, Winn-Dixie, and online supermarkets such as FreshDirect.

Gasoline details. “US stand-alone gas stations” means that superstores, supermarkets, and warehouse clubs that sell gasoline are not considered gas stations. This means no Target, no Costco, no Sam’s Club. Examples of merchants that count (and this is not a complete list!) are Exxon, Mobil, Hess, Shell, Gulf, Murphy USA, Murphy Express.

Major US Department stores details. These are the only stores that qualify:

Annual fee. The card has a $95 annual fee, so you’ll want to utilize that 6% cash back on groceries to maximize your value. If you spend the max cap of $500 a month at supermarkets, at 6% back that would net you $360 cash back in a year vs. $60 at 1% cash back. Note that simply spending $31 per week at supermarkets at 6% cash back will result in over $95 Reward Dollars per year to cover the annual fee.

If you don’t like the idea of paying an annual fee, the Blue Cash Everyday Card from American Express offers 3% at U.S. supermarkets on up to $6,000 per year in purchases with no annual fee. It currently offers a $150 statement credit after you spend $1,000 in purchases on your new Card within the first 3 months. You can also learn more about this card and apply online at CardRatings.com.

Cash back is officially given in the form of Reward Dollars that can be redeemed as a statement credit, gift cards, and merchandise. Statement credit are as good as cash, so I would just stick with that.

Bottom line. The Blue Cash Preferred Card from American Express has the key feature of 6% cash back at US supermarkets (on up to $6,000 per year in purchases, then 1%) along with 3% cash back at gas stations and select major department stores. I treat this card like one of my 5% cash back cards, except there are no rotating categories or activation to worry about. Supermarket purchases go straight on this card all year long. Then in December, I use up the rest of the $6,000 annual spending limit on gift cards for holiday presents.

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Comments

Nope, this is not a new card, but it is an improved offer. The old sign-up bonus for new cardholders was $100 and now it is $150. I never wrote a specific post for this card, so I figured this was good time for it.

I have the Blue Cash Card where I have to spend $6500 before I get 5% on gas, groceries and drugs and 1.25% everything else. Trying to figure out if this is a better deal overall? We spend about $400 in gas and $500+ in groceries per month

I have that one too. But I noticed that the “everything else” percentage quietly dropped to 1%, whereas it was 1.5% when I started. Also, it has changed to “select drugstores” and my local Walgreens and CVS don’t see, to qualify.

Just beware, I went to apply and got a screen that “the original offer was no longer available” but apply here for the latest. It looked identical so I went ahead. But on second thought I went looking for any mention of the $150 welcome bonus once inside AMEX and couldn’t find it – so buyer beware. I wasn’t approved instantly (normal) but if I get it, I’ll call before activating and confirm. Thanks Johnathan for your efforts…

We apologize that the offer you are looking for may no longer be available.
Click here to learn more and apply for the current offer.

@joally
I was using the older card for 3-4 yrs but upgraded to the Preferred (knowing that I won’t receive a sign-up bonus) because the older card had a minimum spending requirement before you can earn 5% on groceries & gas, whereas the Preferred gives you the 6%/3% cashback from your first purchase & you can redeem the cashback earnings anytime. I did the math & figured that I can earn much more even w/the annual fee using the Preferred rather than the older card.

@Alicia,
I think that most credit card cashback programs are like that. You can call Amex before applying for the card & ask if your favorite grocery store qualifies for cashback. I wish crredit card companies publish a list of eligible merchants that we could look at. Does anyone know if there is such a list?

@Brian R – These percentages are as long as you have the card, they are not limited to a certain timeframe.

@Ron – You’ll have to run the numbers, as it also depends if you spend other things on the card. If all you put on it is the gas and groceries, you go past $6,500 on the old version of this card in 7.2 months. 6,500 x 1% + 4300 x 5% = $280 in rewards per year with old Cash card.

$500 x 12 x 6% + $400 x 12 x 3% – $75 annual fee = $429 in rewards per year with new Blue Cash Preferred. Check my math, but you’ll come out ahead with the Preferred because you spend a good chunk on groceries.

@joally – I’m not sure if you can convert, I would call the number on the back of your card. I would think you could either convert if they were the same or you could apply for a new card, as they don’t offer the old version anymore. (See MB’s comment as well)

@Joshua – Sorry, I don’t really know what happened there. This is the new offer that was communicated to me by AmEx and their partners.

@MB – Well, there you have it, I guess you can upgrade to the Preferred.

@Alicia – Good tip about those small, local organic specialty stores, you should try them out on a statement first.

Every store that has a credit card merchant account is classified electronically under a certain category. Gas station, convenience store, fast food restaurant, clothing store, supermarket, etc. I don’t think most cashiers would know what that classification is for certain smaller merchants, the ABC article had a small local organic store classified under “specialty store” and not a “supermarket”. After some pressure, AmEx changed the classification so it would count, and also awarded people cash back retroactively. But the big chain supermarkets should all be included.

If you have a specific store you want to know about, I would just charge a purchase on it with an existing credit card and then call your card up and ask for the classification category.

@Jonathan. No need to call. Amex tells you online the category of the merchant when you expand the transaction detail. Couple of other things about this card. Statement credits in $25 increments. Points earned for a given month don’t show up until statement posts for the following month. Then you need to pay month two balance before you can submit points for credit for month one. Buy gift cards at the grocery and earn 6% back for “grocery” purchases.

Hi – Just wanted to clarify that in my case, the grocery is not “small” (there are multiple locations), and offers far fewer organic items than Whole Foods or Trader Joe’s (both officially deemed by American Express as grocery stores). When I called AE for an explanation, they told me the merchant didn’t consider themselves a grocery store. When I called the grocery store, they were stunned to learn that AE didn’t categorize them as a grocery store and would be contacting them. When I called AE back, they said the merchant simply needed to call them to be properly reclassified, and that they would “investigate” and write me back. Still waiting…

Add it works on gas cards from the grocery store too, which if you are willing to put in the effort it will give you 6% back on gas not 3%, I get Shell gas cards (which occasionally they have them 10$ off $50 at Publix)

In the fine print, it says that the $150 is for people who are not current AmEx cardholders. That means no AmEx at all, apparently. I applied for this through a $150 bonus link, and I have not seen a bonus of any kind… but I had another AmEx. I will be calling them about it but I am not terribly hopeful.

@Fred, if you are an existing Amex customer, but with only a business card (Blue Cash is a consumer card), you’ll still qualify here. I’ve had a Costco Business Rewards card for years and my Blue Cash Preferred account opened earlier this year came with all the perks listed here by Jonathan.

@Alicia, the type of merchant classification entirely related to the company that processes card transactions for the merchant. If their industry typically has high-volume, low dollar transactions (e.g., conveneince store), the % fee they pay per txn will be hgiiher than a lower volume/high dollar (auto body shop). Your store’s owners may have originally claimed to be a “specialty store” instead of a grocery to get a better fee structure from their credit card processor, which is common sensical until they find they have customers who are upset they can’t get grocery rewards at their stores.

Hi
I also like the Fidelity Visa rewards signature card. 1% cash back upto 15K per year in spending . After that 2% cash back. No restrictions on purchases.
so if u are spending 30K per year , then you get an additional $150 per year.
Raghu

atc1: Most of the reloadable Visa/MC cards (at least in MA) carry a fee. Might be flat but I’ve seen it for around $5. So $100 card wouldn’t be much benefit, but if the fee is flat for higher values, it might still make sense.

I hate to be the bearer of bad tidings, but I found out today that the American Express Blue Cash Preferred is now capping the 6% back on supermarkets. Only the first $6,000 spent at supermarkets will qualify for the 6% back. Up until this month there was no cap on the 6% back, so this represents a significant change for some people. Apparently I will be grandfathered in only until mid-January, at which point the new rule will apply to me (as it already is to people now signing up for the card).

@amdg – Thanks for the reminder – I got that too, but wanted to clarify that the wording actually means that you’ll be grandfathered until your renewal date after 1/15/13, whenever you next have to pay your annual fee.

So if you renew in December 2012, you’ll be good until December 2013. If you last renewed in June 2012, you’ll be good until June 2013.

Took your advice on how multiple applications at the same time will not affect credit. I applied for two cards from chase and rejected for both. The only reason in denial letter: too many credit inquiries (and no, I have not applied for anything else that would count as a credit inquiry since march). Thanks a bunch.

@howard. $360-$75 = $285/$6,000 = 4.75%. If you got $150 as a signup bonus you still get 6% for two years on the $6,000. Depending on how much you spend it may be worthwhile to have your SO get the card as well independently and not have each other as AUs on your respective card. Otherwise if you have a PenFed Rewards card there is 3% on groceries after one hits $6,000.

@Jonathan – That’s good news; thanks. I haven’t received my letter yet (found out over the phone with AMEX), so I didn’t know that I get 6% back on all purchases until I pay my annual fee. Time to stock up on Amazon gift cards!

@howard and @MAC – Also, AMEX usually gives you $25 off a purchase on Small Business Saturday (usually the first Saturday after Thanksgiving). Not a guarantee, and not much, but still. If memory serves that $25 works for all of the cards you have on an account. So if, say, you and your wife each get $25 off my making qualifying purchases that day, then you could think of the annual fee as being reduced by $50 from $75 to $25.

Is Fred correct in his post? I don’t believe you directly responded to it.

Fred Fnord Says:
May 9th, 2012 at 1:33 pm
In the fine print, it says that the $150 is for people who are not current AmEx cardholders. That means no AmEx at all, apparently. I applied for this through a $150 bonus link, and I have not seen a bonus of any kind… but I had another AmEx. I will be calling them about it but I am not terribly hopeful.

Welcome bonus offer not available to applicants who have had this product within the last 12 months or any other Consumer Blue Cash® Card account within the last 90 days

That does not exclude every American Express card, it specifically excludes Blue Cash card holders. There was a time that this card didn’t have a sign-up bonus, so there may be some confusion with that. Always make a printout or PDF copy of your application pages with bonus details. Then, I recommend using the online secure message feature of American Express to ask for the bonus, and I have been successful going that route where customer service just credits me the bonus.

Eureka! You saved me $75 by clarifying the $6 cap on grocery purchases. THANK YOU! The AMEX representative I spoke with 10/23/12 was unaware of this policy until I mentioned your blog. She conferred with her supervisor whom confirmed the $6K cap annual and she was dumbfounded. I find great pleasure in truth moments- thank you for creating one Jonathan!

Now I’m back in my original boat of looking for a grocery benefit card. Any suggestions for a personal or business card; no balance is ever carried on, $4,200 per month in groceries, $75 per mo gas, and minimal department stores purchases?

Thank you for ideas. Sending you Korean Yam Noodles with Avocado wishes, Jenn

Of course- right after I get the card! Oh well, still a good deal. Does the cap extend to other things (gas, etc.)?

I took your advice and started using it to buy my groceries at Kroger, collecting the gas reward points (.10 off for ever 100 points…$1 = 1 point), and buying Shell gift cards. I figured I get the 6% back, plus whatever I save at the pump.

I’m planning to use my Chase Freedom and/or Discover More Cards when the categories switch to reward Groceries at 5%. That should keep me within the 6k limit on AMEX. If I have not used up my AMEX 6k limit at the end of the year I can still buy GC’s.

That conflicts with a previous customer service conversation where they said if the renewal date is June 2013, then you’ll still have no caps until June 2013 and then a $6k cap after that. The specific wording states that “this change becomes effective when your account renews on or after January 15, 2013.” The calendar year thing doesn’t really make sense because if it renewed on Jan 14th, you’d still have no cap for all of 2013 anyway. I wonder if there is a way to see the $6,000 cap in your account.

Hi Jon:
I will try and double check with AMEX again and see what they have to say on this. The reason I put this up was to get feedback as well as make others aware of what might be in store.
Can you too check this again with AMEX customer service as there are conflicting answers.

my wife and i both have the amex preferred, i do the majority of the shopping, anyone have an idea if she can add me as an authorized user on her account even though i currently have my own account? Thanks for the feedback!

“You will earn a reward of 6% on the first $6,000 of eligible purchases in an annual reward year at supermarkets located in the U.S. (superstores and warehouse clubs are not considered supermarkets; 3% on eligible purchases of gasoline at gas stations located in the U.S. (superstores, supermarkets and warehouse clubs that sell gasoline are not considered gas stations); 3% on eligible purchases at select department stores located in the U.S. (The current list of select major department stores at which you can earn a 3% reward is available at americanexpress.com/rewards-info); and 1% on all other eligible purchases.”

The definition of grocery stores or supermarket does not include the national chains like Costco, Walmart, Target, Fred Meyer etc. That means the 5% (or 1%) cashback that you will receive will be only at local stores like PCC, Trader Joes, SafeWay, QFC, Albertsons etc.

Greetings and thank-you’s! I’ve been following your blog for a few years now, and just applied for the Amex Blue Cash Preferred, based on this article. I used your link to apply. I had a minor difficulty filling out the form, but a live chat person was there to help me through the process and I was approved in less than a minute. Btw, I also checked JD Powers website and they gave Amex the top rating among all the credit card issuers. Thanks for this and all of your great money advice.

Well it makes no sense to have to have to use the cash back earned to pay for the annual fee. Why have a card with an annual fee in the first place? I don’t want to think that if I spend more that I wil get more back to. Then I would want to spend more. But I guess someone might be proud to pay an annual fee to hold and use a card.

Jonathan, quick note about “You can easily track how much you’ve spent on groceries on your online account. Just go to “Statements & Activity” > Chart logo (Graph and Filter your Transactions), and then click on “Merchandise and Supplies”. Adjust dates as necessary.”

I used this method as well until about a week ago. I noticed I had reached $6k on groceries and called AMEX just to verify before I switched to another card for late December groceries. The rep quoted me a grocery total of closer to $5k toward the grocery total for the year, thus giving me about $1k to spend at 6%.

It turns out the “Statements and Activity” method was counting our local deli as a grocery store, where we buy not only deli items but beer and wine and soft drinks regularly, but the 6% cashback offer does not count it as a grocery store. This was particularly interesting because during the quarter that Chase Freedom did 5% at grocery stores, the same deli indeed DID count as a grocery store. So, your reader may want to call and check if there’s any iffy-ness about reaching the $6k total.

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Rates and terms set on third-party websites are subject to change without notice. Per FTC guidelines, MyMoneyBlog.com has financial relationships with the merchants mentioned. MyMoneyBlog.com is compensated if visitors click on any outbound links and generate sales for the said merchant.

The editorial content on this site is not provided by the companies whose products are featured. Any opinions, analyses, reviews or evaluations provided here are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by the Advertiser.